Cost-reflective Tariff Design

Project outline

Recent regulatory reform efforts in the Australian National Electricity Market (NEM) have included a number of rule changes aiming to contain electricity price rises driven by network investment by distributed network service providers (DNSPs). One focus area has been the economic inefficiencies of current network tariff arrangements, particularly for residential and small business consumers. 

Current tariffs are typically shaped by limited metering capabilities and equity considerations and have generally involved a major volumetric consumption component. This tariff structure doesn’t clearly reflect the role of consumer contributions to network peak demand and hence in overall DNSP expenditure. 

This work aims to build knowledge around the design of more cost-reflective tariffs.  Cost-reflective tariffs should, in theory, charge customers according to the costs they impose on network businesses. This should ensure that customers cover the costs they cause and, very importantly, now see price signals that incentivise efficient investment and operation of their own loads, storage and distributed generation. 

CEEM has been interested in this work for a number of years, including a number of papers and presentations as shown below. We have most recently developed a Tariff Tool that can be used to assess various impacts of different tariff designs.

Development of the Tariff Tool

The work is supported by Energy Consumers Australia, Project 'Tariff Assessment Tool, No 814. We have developed a modelling tool to assist stakeholders wishing to contribute to network tariff design in the Australian National Electricity Market. It is an open source modelling tool to assist stakeholders in assessing the implications of different possible network tariff designs, and hence facilitate broader engagement in the relevant rule making and regulatory processes in the NEM. Our tool takes public energy consumption data from over 5000 households in NSW, and allows users test a wide range of existing, proposed and possible tariffs structures to see their impacts on network revenue and household bills. Demographic survey data of the households allows you to explore the impacts of these tariffs on particular household types – for example, families with young children.  The tool can also show how well different tariffs align these household bills with a households’ contribution to network peak demand.  The tool and data are open source – you can check, validate and add your own data sets; test existing or even design your own tariffs, and validate and even modify the underlying algorithms.

Download the Tariff Tool!

Matlab version:

You can download the Tariff Tool here. TDA is available in windows and Mac versions. You should first install the Matlab Compiler Runtime (MCR) version 2016b (MCR9.1) and then run the TDA.exe (or for mac). Please refer to TDA tool wiki page on Github for more information. Please email any comments and bugs here.

Python version:

The tool is now available in python version as well with new features and functionalities. Check out the release page for latest release or the actual github page for the source codes.

Load data

The tool currently uses household load data from the Smart Grid Smart Cities dataset. If you can provide any more household load data, please get in contact with us!

The Reference Committee for this work is:

  • Lynne Gallagher, ECA
  • Robert Telford, AER
  • Mark Byrne, TEC
  • Sam Wanganeen, Department of Environment & Energy
  • Dean Lombard, ATA
  • Iain Magill, UNSW
  • Anna Bruce, UNSW
  • Rob Passey, UNSW

UNSW Research Project Team:

Navid Haghdadi

Nicholas Gorman

Robert Passey

Anna Bruce

Sharon Young

Iain MacGill 


Title & place of publication Author Research area Type Links Year
'An open source tool for analyzing the impact of electricity network and retail tariffs on consumers', IEEE Power & Energy Society General Meeting (PESGM), Montreal, Canada Navid Haghdadi , Iain MacGill , Nicholas Gorman , Rob Passey , Anna Bruce Electricity Markets & Restructuring Conference Papers 2020
'Submission to SAPN’s Tariff Structure Statement for 2020-25 and their Pricing Proposal for 2019/20' Rob Passey , Iain MacGill , Navid Haghdadi , Anna Bruce Electricity Markets & Restructuring Submissions 2019
'Designing more cost reflective electricity network tariffs with demand charges', Energy Policy, 109, p642-649. Passey, R., Haghdadi, N., Bruce, A., MacGill I. Energy Efficiency & Distributed Generation Journal Papers 2017
Tariff Design and Analysis Tool Users Guide Navid Haghdadi , Rob Passey , Anna Bruce , Sharon Young, Iain MacGill Electricity Markets & Restructuring Reports and Working Papers 2017
’Electricity network revenue under different Australian residential tariff designs and customer interventions’, IEEE PESGN, July 2016 Young, S., Bruce, A., MacGill, I. Energy Efficiency & Distributed Generation Conference Papers 2016
'An Assessment of the Cost-Reflectivity of Proposed Network Tariffs in Australia’, Asia-Pacific Solar Research Conference 2015, Brisbane, Australia Kelly, D., Bruce, A. , MacGill, I., Passey, R. Energy Efficiency & Distributed Generation Conference Papers 2015
Dynamic Model Approach to Assess Feed-in Tariffs for Residential PV systems Oliva, S.J., MacGill I. Energy Efficiency & Distributed Generation Conference Papers 2013


Event Presenter Typesort descending Research area Location Date
Workshop: Cost-Reflective Pricing – some different perspectives Various Public forum Energy Efficiency & Distributed Generation AES Conference and Exhibition, Sydney ATP Wednesday, June 1, 2016
(Re)designing cost-reflective tariffs Rob Passey Seminar Energy Efficiency & Distributed Generation AESA Conference and Exhibition, Australia Technology Park, Sydney Wednesday, June 1, 2016
Temporal and spatial variability of distributed PV impacts on Australian distribution network load profiles Navid Haghdadi Seminar Energy Efficiency & Distributed Generation CIDER Tuesday, August 15, 2017
Open Source Network Tariff Tool; Outcomes to date, what’s coming next Iain MacGill Seminar Electricity Markets & Restructuring Energy Consumers Australia, Board Stakeholder Forum, Sydney Wednesday, August 15, 2018
Workshop on Distribution Network Tariff Assessment and Design Rob Passey, Iain MacGill, Brendon Crown, Craig Memery, Mark Burne Workshop Energy Efficiency & Distributed Generation UNSW CBD Campus, O'Connell St, Sydney. Tuesday, June 27, 2017
Workshop: Network Tariff Analysis Tool Iain MacGill, Rob Passey, Navid Haghdadi, Sharon Young Workshop Energy Efficiency & Distributed Generation APSRC 2016, ANU, Canberra Thursday, December 1, 2016
Workshop on Distribution Network Tariff Assessment and Design (Melbourne) Iain MacGill , Navid Haghdadi , Lynne Gallagher (ECA), Dean Lombard (ATA), Scott Sandles (AER) Workshop Electricity Markets & Restructuring, Energy Efficiency & Distributed Generation Asia pacific Solar Research Conference, Bayview Eden, Melbourne Tuesday, December 5, 2017
Three CEEM Workshops on Distributed Energy Tools and Analysis Iain MacGill , Navid Haghdadi , Anna Bruce , Mike Roberts, Rob Passey , Naomi Stringer, Luke Marshall Workshop Energy Efficiency & Distributed Generation UNSW Rm TETB LG03 Monday, December 3, 2018
Tariff Design and Assessment workshop - Canberra Iain MacGill , Navid Haghdadi , Nicholas Gorman, Rob Passey Workshop Electricity Markets & Restructuring The Canberra Rex Hotel Tuesday, December 3, 2019
Tariff Design and Assessment Workshop - Sydney Iain MacGill , Navid Haghdadi , Nicholas Gorman, Rob Passey , Anna Bruce Workshop Electricity Markets & Restructuring UNSW CBD Campus Wednesday, December 11, 2019